Ranbaxy misses May deadline to supply raw materials to Astrazeneca

NEW DELHI: Ranbaxy Laboratories’ scrip shot up 20.7% on Monday, a day after former owner and CEO Malvinder Singh stepped down, despite missing the

deadline of May 2009 to start supplying raw materials to British drugmaker Astrazeneca. The supplies to Astrazeneca which could have potentially brought revenues of $40 million this year (May-December 2009) has been delayed by 2-3 months, a top company executive said. Atul Sobti, who tookover as the Ranbaxy CEO & MD from Mr Singh on Sunday said Astrazeneca had already reviewed and approved the company’s drugs. Meanwhile, the Ranbaxy scrip rose 20.7% to end the day at 266.70 at the Bombay Stock Exchange (BSE) on the anticipation that Daiichi Sankyo, which owns 64% in the company, may increase its stake. Says CLSA's research analyst Hemant Bakhru, “There are expectations that Daiichi Sankyo might acquire more stake in Ranbaxy, at some point of time.” The surge translates into a gain of Rs 1,900 crore for Ranbaxy in a single day. There are also expectations that the direct involvement of the Japa-nese parent in day to day operations would be able to resolve the on-going problems with the US drug regulator sooner. In an analysts call on Monday, Mr Sobti said the company has met the US Food and Drug Administration (FDA) officials three times since January this year and expects to have another meeting next month. The company’s new chairman Tsutomu Une said Daiichi Sankyo has laid the foundation to monetise gains from its acquisition of Ranbaxy. Daiichi Sankyo and Ranbaxy have also formed a team for drug re-search and emerging markets businesses. On Sunday, in a swift move, Malvinder Singh stepped down as the chief of Ranbaxy, ending his ties with the company which his family owned for almost 50 years. Two other board members of Ranbaxy who were nominees of Mr Singh also resigned giving Daiichi Sankyo a complete control in the seven-member board. Adds Angel Broking pharma analyst Sarabjit Kour,”Normally in top management rejigs stocks react negatively due to uncertainty in the company. But in the case of Ranbaxy, Daiichi Sankyo already had a controlling stake and expectations are that they would expedite the FDA matter, though this is not in their hands and it will take time.” Daiichi Sankyo’s complete control of Ranbaxy would also allow the Japanese company to take proactive actions to mitigate the forex loss.